* Oops – my bad! In Sunday’s BUZZ I sent you to check out Bruce the MISSOURI TAX GUY’S latest “Reads from Last Week” – but there were none! I was anticipating one.
* It’s the big 6-0 for Kay Bell! I am talking about “Tax Carnival #60: Merry Taxes 2009!”, which is now running at DON’T MESS WITH TAXES.
I seem to recall I was going to use this Carnival to introduce my new blog on Schedule E rental property issues, and submitted an entry. But it apparently never got to Kay. I will have to check on that one. I also recall her “tweeting” something about having problems with submissions.
Even if I am not represented this time you should check out its many interesting and informative entries.
* Check out this horror story from Danny Westneat of the Seattle Times titled “$10 an Hour with 2 Kids? IRS Pounces”.
The DFBs (and I do not mean damned fool bureaucrats). So much for the “kinder, gentler” IRS.
Granted the EIC pretty much encourages tax fraud, and EIC claims should be investigated. But this is ridiculous.
Just another reason the EIC should be removed from the Tax Code and properly administered as a welfare program.
* TAX GIRL Kelly Phillips Erb discusses the above horror story in “IRS Insists Mom is Too Poor to Support Kids”. Her take -
“It’s really about agendas and the economy. As the economy slows, I fully expect more of these horror stories.”
* Over at GROWING WITHOUT RAIN, the author, an unnamed tax professional in North Carolina, has a slightly different take on the issue, and makes some excellent comments on the overall issue (especially his final paragraph) in the post "Enforcing the Rules– Or Extracting An Unfair Penalty" -
“Unlike the author of the article and many of the commenter's, I can’t entirely fault the IRS for what they did. Rachel Porcaro was unfortunate, to be sure, but there are many other people out there who deliberately set out each year to do deliberately what she did inadvertently – claim as many low-income credits as they can, at best questionably, and at worst deliberately fraudulently.
There are just too many people out there who know (or think they know) how to game the system to max out on EIC, and too many tax preparers out there who will prepare their returns without questioning whether the taxpayer is actually entitled to those credits. As long as we have a system that encourages low-income people to earn some income, but not “too much” income, we will have people who try to work that system to their advantage, and we will have a need for due diligence on the part of professional tax preparers, and on the part of the IRS, to flush out that fraud.
I don’t deny the need to help low income earners, to be sure. But I don’t think a system which is as easily subject to manipulation as is EIC is the best way to do it.”
* Bill Perez provides a good year-end tax tip for taxpayers with kids in college in his post “Prepaying College Expenses (Year End Tax Tips)” at WILLIAM’S TAX PLANNING BLOG.
* And Joe Kristan addresses year-end planning for businesses in “Fixed Assets and Year-End Planning” at the ROTH AND COMPANY TAX UPDATE BLOG.
* Joe also eloquently adds his voice to mine and that of other tax pros and tax bloggers who speak out against the conceit “that by careful rewarding certain behaviors with tax credits, Congress can make the world a better place” in his post “Missing The Target”.
“. . . the real problem is in believing these things can ever be accurately targeted. They are complicated -- even tax pros have to keep going back to their books when they claim these -- and errors are inevitable. The IRS barely can process the returns with its creaky computers, let alone catch all of the mistakes.”
As is often the case, his “bottom line” says a mouthful –
“It's hard enough just for the IRS to compute taxable income and process returns. Now the IRS is supposed to manage health, education, research, energy policy, antipoverty efforts -- you name it. It's not surprising that it's a mess; it's a surprise they can function at all.”
* The CCH daily email tax newsletter tells us “Estate Tax Action Uncertain in Senate”.
“The likelihood that the Senate will act on extending the estate tax before it expires at the end of 2009 remains uncertain as health care reform dominates lawmakers' attention.”
Senate Majority Leader Harry Reid has “as much as admitted that there was no time to pass the legislation this year”.
One option being considered is “a one-year extension of the estate tax at current 2009 levels that could be attached to an anticipated omnibus appropriations bill”.
So there still could be a lot of plugs pulled in January 2010!
* The Tax Foundation’s TAX POLICY BLOG tells us that “States Enact More Tax Amnesties”, with Massachusetts, New York, Ohio, and Pennsylvania jumping on the bandwagon.
TTFN
* It’s the big 6-0 for Kay Bell! I am talking about “Tax Carnival #60: Merry Taxes 2009!”, which is now running at DON’T MESS WITH TAXES.
I seem to recall I was going to use this Carnival to introduce my new blog on Schedule E rental property issues, and submitted an entry. But it apparently never got to Kay. I will have to check on that one. I also recall her “tweeting” something about having problems with submissions.
Even if I am not represented this time you should check out its many interesting and informative entries.
* Check out this horror story from Danny Westneat of the Seattle Times titled “$10 an Hour with 2 Kids? IRS Pounces”.
The DFBs (and I do not mean damned fool bureaucrats). So much for the “kinder, gentler” IRS.
Granted the EIC pretty much encourages tax fraud, and EIC claims should be investigated. But this is ridiculous.
Just another reason the EIC should be removed from the Tax Code and properly administered as a welfare program.
* TAX GIRL Kelly Phillips Erb discusses the above horror story in “IRS Insists Mom is Too Poor to Support Kids”. Her take -
“It’s really about agendas and the economy. As the economy slows, I fully expect more of these horror stories.”
* Over at GROWING WITHOUT RAIN, the author, an unnamed tax professional in North Carolina, has a slightly different take on the issue, and makes some excellent comments on the overall issue (especially his final paragraph) in the post "Enforcing the Rules– Or Extracting An Unfair Penalty" -
“Unlike the author of the article and many of the commenter's, I can’t entirely fault the IRS for what they did. Rachel Porcaro was unfortunate, to be sure, but there are many other people out there who deliberately set out each year to do deliberately what she did inadvertently – claim as many low-income credits as they can, at best questionably, and at worst deliberately fraudulently.
There are just too many people out there who know (or think they know) how to game the system to max out on EIC, and too many tax preparers out there who will prepare their returns without questioning whether the taxpayer is actually entitled to those credits. As long as we have a system that encourages low-income people to earn some income, but not “too much” income, we will have people who try to work that system to their advantage, and we will have a need for due diligence on the part of professional tax preparers, and on the part of the IRS, to flush out that fraud.
I don’t deny the need to help low income earners, to be sure. But I don’t think a system which is as easily subject to manipulation as is EIC is the best way to do it.”
* Bill Perez provides a good year-end tax tip for taxpayers with kids in college in his post “Prepaying College Expenses (Year End Tax Tips)” at WILLIAM’S TAX PLANNING BLOG.
* And Joe Kristan addresses year-end planning for businesses in “Fixed Assets and Year-End Planning” at the ROTH AND COMPANY TAX UPDATE BLOG.
* Joe also eloquently adds his voice to mine and that of other tax pros and tax bloggers who speak out against the conceit “that by careful rewarding certain behaviors with tax credits, Congress can make the world a better place” in his post “Missing The Target”.
“. . . the real problem is in believing these things can ever be accurately targeted. They are complicated -- even tax pros have to keep going back to their books when they claim these -- and errors are inevitable. The IRS barely can process the returns with its creaky computers, let alone catch all of the mistakes.”
As is often the case, his “bottom line” says a mouthful –
“It's hard enough just for the IRS to compute taxable income and process returns. Now the IRS is supposed to manage health, education, research, energy policy, antipoverty efforts -- you name it. It's not surprising that it's a mess; it's a surprise they can function at all.”
* The CCH daily email tax newsletter tells us “Estate Tax Action Uncertain in Senate”.
“The likelihood that the Senate will act on extending the estate tax before it expires at the end of 2009 remains uncertain as health care reform dominates lawmakers' attention.”
Senate Majority Leader Harry Reid has “as much as admitted that there was no time to pass the legislation this year”.
One option being considered is “a one-year extension of the estate tax at current 2009 levels that could be attached to an anticipated omnibus appropriations bill”.
So there still could be a lot of plugs pulled in January 2010!
* The Tax Foundation’s TAX POLICY BLOG tells us that “States Enact More Tax Amnesties”, with Massachusetts, New York, Ohio, and Pennsylvania jumping on the bandwagon.
TTFN
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